TABLE OF CONTENTS March 2008

ETrade: Time To Bail?

Citadel Investment Group, which coughed up $1.75 billion to fund a capital infusion for ETrade in exchange for a 20% stake, is getting mighty edgy as the company’s stock price sags. Enter new CEO Donald Layton, former vice chairman of J.P. Morgan Chase and hopefully, just the man to wheedle a fat buyout offer from brokerage rivals such as TD Ameritrade or Charles Schwab. There’s only one problem: neither potential suitor has any interest in ETrade’s roughly $12 billion of increasingly troubled home-equity loans. > read more

Bone To Pick

JPMorgan’s Jamie Dimon may have prevailed in the first round of the great Bear hunt, but he’s going to have to fight a lot harder to keep everyone else on Wall Street from picking the meat off these bones. From contending with U.K.-born billionaire investor Joseph Lewis (the largest – and, we are guessing, the most nonplussed – of the Bear Stearns shareholders) to retaining the felled bank’s most talented staff, he’s truly got his work cut out for him. Good thing he thought to bring that multibillion-dollar war chest… > read more

Wild And Wooly Whitney At It Again

The young, brazen stock analyst who launched a thousand stock market kerfuffles last year with her shock pronouncement that Citigroup would “in six to 18 months, look nothing like it does now” is at it again. But this time she’s sharpening her knives in honor of UBS and Merrill. > read more

SWINGING THE AX: MERRILL TO LAY OFF MORE 10-15% IN BANKING, WHILE BRACING FOR MASSIVE WRITEDOWN
By Erica Copulsky
> read more

The New Krawcheck?

Looking to rejuvenate Citigroup’s ailing consumer side of the business, CEO Vikram Pandit has tapped Terri Dial, who heads up Lloyds TSB Group's United Kingdom retail-banking unit, as part of his massive shuffling (reshuffling? shuffling in extremis?) effort to get the company back on its feet. Starting out as a lowly bank teller and working her way up through the ranks, Dial certainly has come a long way – which reminds us of a certain other tenacious outsider once tapped to clean up Citi’s retail end of things. > read more

Goldman: You’re Dismissed

According to The New York Post, this may be what Goldman plans to say to a not-so-insignificant portion of its work force. Given the current mood on Wall Street, there’s a lot of reason to believe that for many, this may be a not-so-good Friday. > read more

Goldman: Prosperity To Austerity?

No sooner did Goldman, the world's biggest securities firm by market value, report its sharpest profit drop since 1999 (weathering $2 billion of writedowns on loans and mortgages as revenue from investment banking and trading slid) than the rumors began to swirl…But is it really plausible an institution still doling out multimillion-dollar bonuses to its top rainmakers would cut free water and soda to its employees? (There’s even a question as to whether the G-men ever got free soda.) We need more than this, exhibit A. > read more

All Too Human?

See that’s just the thing about saying you’ll pay $2 a share for Bear Stearns and then, after a period of brief reflection (and verbal lynchings by Bear shareholders) showing just the tiniest bit of weakness about quintupling the bid. As two Michigan pension funds take legal action to fight even the sweetened offer, here are a few reasons why JPMorgan’s Jamie Dimon might want to stop doing things out of the kindness of his heart and go back to doing what he does best: take no prisoners. > read more

Lehman: Tricked, Hoodwinked, Bamboozled

It takes a steady hand to part a major investment bank from $350 million of funds. Or sometimes, just a couple of not-so-reputable contract staffers from a reputable, 150-year-old Tokyo trading house, a handful of dummy business cards, an imposter posing as a high-level executive and a meeting or two at company headquarters in an elaborate Ponzi scheme that, but for the grace of God, pretty much anyone could have fallen for. > read more

JPMorgan To Sweeten Bear’s Honeypot?

While the rest of the world obliviously celebrated Easter, JPMorgan execs were sweating the detail of a certain Bear Stearns bid, which, first set at $2 a share, may now be quintupled to $10. Surely, this would result in Bear shareholders feeling a bit rosier about things, if not the top brass at JPMorgan. But after several days of frenetic, secret, late-night dealings, the Fed is balking at upping the ante. Why? Because, it’s already agreed to back $30 billion of Bear’s most toxic assets with taxpayer money – isn’t that plenty? The big concern: Wither the public backlash? Bear stockholders’ answer: Let them eat Easter eggs. Who will win this war? > read more

Bear Bizarre

In this case, the double entendre “bizarre” being fully intended. As the fate of Bear Stearns hangs in the balance, its paraphernalia is flying off shelves online. Exhibit A: That used Bear T-shirt someone’s been having his morning jog in for, like, a decade? It just sold on eBay for $151.76. (That equates about 14 or 15 shares of the once-venerable institution.) Here, the other Bear items to recently hit the auction block. > read more

Airline Bind

There has long been much grumbling about how the best airport lounges are not in the U.S. (and not operated by any American airlines, either). This is jarringly clear from the past year’s World Airline Awards from Skytrax, whose global survey yielded nary a U.S. traveler’s outpost that was anything other than wholly plebeian. And there’s a good reason for that: U.S. airlines are in trouble – and with the Delta-Northwest union going south, pretty soon there may be a lot more to worry about than cruddy lounges. > read more

‘Strong Dollar’ Talk Rings Hollow

If the dollar is so hell-bent on outdoing its 12-year low, scored this week, then a lot of people are gonna’ have something to say about it. Certainly not U.S. Treasury Secretary Henry Paulson, who says he backs a strong dollar but then won’t take reporters’ questions. But, you know, other folks – such as the kindly economists and forex analysts from Goldman Sachs and Morgan Stanley who have dutifully begun sounding the alarm over a possible G-7 intervention. And also the nations stupefied in mortal pain as once-ravenous American consumers stop indiscriminately buying their stuff. Why, even Toyota Motor Corp. President Katsuaki Watanabe, in the spirit of putting in two cents, had this to say… > read more

BHP’s Scorched-Earth Policy

If BHP Billiton was a real-life suitor, we suspect it wouldn’t be the decorous type who would open doors for you and wait patiently for you to return its calls. No, we rather think it would be the kind that overwhelms your answering machine with voicemails and waits on your back porch at night for you to come home after grilling your friends. (Which, if you’re a banker on this deal, is as it should be.) Here, BHP reveals its latest hand – and how it plans to play to win. > read more

Steal From Cool-Hand Dimon’s Playbook

"Jamie Dimon was in the right place at the right time and he pulled the trigger fast," notes an admirer to Bloomberg News. But it took the life lessons of another, more senior banker to help make JPMorgan’s CEO the fastest gun in town. > read more

Coming To A Store Near You: Bear Stearns, The Book

As this “story” really has yet to conclude, it’s pretty creepy that big-time publisher Doubleday has already signed up a famed Wall Street writer to give an account of Bear’s felling in what’s laughably being billed as “a story of quest, love and moral retrospection.” Gag and double gag. And that’s not the worst of it, even. Check out the title. > read more

Big Ben’s Brio

Bravo, Ben Bernanke, you Fed chief you. You flouted Wall Street expectations (Goldman, Morgan Stanley, Citigroup and Bear Stearns, all) slashing rates by less than expected and yet you still came out swinging with the biggest stock-market rally in five years. A word on why Ben is ON it like Eliot Spitzer’s on...uh, nothing. Bad analogy. > read more

Clear Channel Goes Murky

In what will no doubt go down as the Infamous Bexar County Play, the long list of banks looking to relieve themselves of financing Clear Channel’s multibillion-dollar buyout, not to mention the private-equity firms suing them, have begun doing battle over the finer points of “tortious interference with contract” charges in Texas, although none of them actually bothered to show up in Texas to do so Thursday. We imagine the presiding judge got rather lonely, issuing his fiery oratory to no one. Which explains why he was angry enough to issue a restraining order. That’ll learn ‘em. Here, a peek inside this hall of mirrors. > read more

Mortal Pain: M&A Fees Plunge 35%

As first quarters go, this one could have been a good deal better, say the many bankers who have kindly stopped to e-mail us between transcontinental flights as they scour the world for a drop of water on the desert that is the global deal drought. What appeared to be a serious, if passing, dry spell at the beginning of the year has now ended up knocking the bejesus out of Wall Street financiers in ways they never could have imagined. Here’s to a more auspicious second half as we assess this quarter’s official damage report. > read more

Big Deal

This is more like it. A $100 billion deal proposal being floated in Europe is signaling not only a willingness among corporate monoliths to band together in a renewed spirit of cooperation, but also the promise of greater support for once unheard-of cross-border configurations. Now, if only the politicians would shut up… > read more

It’s Getting Sirius

The $5 billion marriage of competing radio networks XM and Sirius has been blessed by the U.S. Justice Department, at long last bringing together the programming of Oprah Winfrey, Willie Nelson, Snoop Dogg, Howard Stern, Martha Stewart and National Public Radio…into one giant, unholy union. But will the FCC and consumer groups screw this one up? > read more

Marathon’s $500 Million Run

Why private-equity-cum-hedge-fund titan Michael Gross’s special purpose acquisition vehicle, Marathon Acquisition Corp., is finding the container-shipping business mighty fetching these days. > read more

Clear Channel: Deadlock, Despite Deadline

There’s still no sign that this deal will close by the time its marketing period ends next week. As the bankers and private-equity firms involved appear to be quietly pointing fingers at each other for stalling, traders are rushing ahead to push the stock down, betting a cataclysm lies ahead. Meanwhile, Clear Channel holds a wild card – but will it use it? > read more

Clear Channel On Ropes

Only this time, instead of the buyers being on the run, it looks like it’s the banks, which are on the hook for billions. There’s just one catch: the lenders have almost no exits from this deal. Will Clear Channel and its would-be private-equity acquirers have to go to court to force their hand? > read more

Smoke In The City: JPM Buys Bear For A Song

And we’re not talking Jimmy Cayne-type smoke, either. We’re talking about the kind of smoke that could only come from a fire sale – for a bank, or anyone, the ultimate insult. Here, the unabridged story of how Bear Stearns got itself into this mind-boggling mess and why it finally was forced to agree to sell itself to JPMorgan for – gulp – $2 a share in stock, or less (waaay less) than $300 million. What next? The Fed drops $30 billion on helping Bear with its less-liquid assets? As a matter of fact, yes. > read more

Bankers, Pole Dancing – Any Questions?

By day, Victoria Gibbs works in the banking world. By night, she puts on hot pants and high heels, climbs a pole and swings upside down. How women in finance are finding a new way to take the edge off after a long day at the office. > read more

Fired? Maybe It’s Time To Let That In-House Designer Go…

And you really don’t need a gardener when you live in Manhattan, do you? For the one shrub? Really, it’s not that serious. Obviously, you can’t fire the butler – who answers their own front door anymore? And, while it will hurt, the damask valences and Swarovski planters will have to wait. An insider’s look at how New York’s various champagne dealers and personal wotsis have been utterly orphaned by Wall Street’s outbreak of pink slips. Both a cautionary tale and (we must admit) good read. > read more

Bear: Too Many Hands In The Honeypot?

Between Bear Stearns’s warring shareholders and bondholders and those looking to buy it (JPMorgan) and those looking to sell it (market shorts) and those investigating trades on it (the SEC) and those who just want it all to be over already (the Fed) this is shaping up to be a showdown for the ages. The overarching question of this white-shoe, white-knuckle battle: Is it really reasonable to expect to pay $2 a share for a monster bank that was trading at $65 just last week? > read more

Clear Channel Or Bust

It’s finally happened: top private-equity firms have slapped a veritable Who’s Who list of banks with lawsuits in New York (as well as Bexar County, Texas) enjoining them to cease and desist with all their foot-dragging over financing the $19.4 billion Clear Channel buyout. As traditional Wall Street alliances unwind fast, one of the filings even goes so far as to say, "If the banks' promises are not worth the paper on which they are written, commercial transactions – from the most basic to the highly complex – cannot work." As the banks in question remain unwillingly on the hook for billions, could this be the end of Wall Street dealmaking as we know it? > read more

JPMorgan’s Bonus Play

JPM’s CEO Jamie Dimon is a smart man. And in his many travels, he’s picked up on some distinct subtleties in the dealings of men that have allowed him to persuade them to do exactly what he wants. Chief among them: money talks. > read more

Fat Chance?

The not-so-intuitively-named TietoEnator Oyj, a Nordic computer-services provider, just got the bid of its life to the tune of $1.7 billion from a cash-flush Swedish suitor. So why is it turning its nose up? > read more

BNP’s Back-Off

In a statement on its Web site today, BNP Paribas says it no longer has merger designs on Societe Generale, marking the second time the latter has slipped from its hands. Only, in this instance, it looks as though BNP actually wanted it to. Here, the announcement. > read more

Spitzer’s Special Lady Friend

She left a broken home on the Jersey Shore at 17. She came to New York City to work the nightclubs as a rhythm and blues singer (who’d ‘a thunk?) Now, at 22, she is the unwitting star of the seamy drama that is the downfall of Gov. Eliot Spitzer of New York. (And damn if this plantation-burning, bodice-ripper isn’t just the spitting image of his wife when she was in her 20s...) > read more

All For The Hand Of Alitalia

In published comments over the weekend, Italian airline Air One chairman, Carlo Toto, said his company might soon make a new offer for Alitalia to rival Air France-KLM. That said, after hitting the books, it could take up to three weeks to come up with something. For Alitalia, will that be too long? > read more

Cash It Like The Kremlin

We’re not looking to overstate things here – anyone who’s ever done a deal in Russia knows what a wringer it can be. That said, there’s something to be said for the newfound strategy of the Krem’s men, who are finding ways to refurbish national companies so that they can flip them for a killing. Such as this one, for which France's Renault recently plunked down $1 billion. > read more

Pernod Gets Nod

Sweden is selling stakes in a smattering of telecom, bank, mortgage, property and other companies – and Pernod Ricard is standing there, 55 billion kronor in hand (guess what that is in U.S. dollars?) ready to take full advantage of this raining manna from heaven. > read more

Cayne: Down With The Ship?

If it’s true that the equity and options grubstake held by James Cayne of Bear Stearns once amounted to $1 billion, and he’s only cashing out now at an estimated $61.3 million, is this not a major indication of his belief, until the very end, that things might turn around for the bank? He bet huge – and lost. But is that not some kind of measure of his loyalty? We prefer to think of that than of this sewing-circle chitchat out today over which condo he plans to buy with his salvaged coin. For shame. > read more

Deutsche’s Doldrums

Deutsche Bank’s stock is receiving a sound pummeling today after the bank let slip that the worsening credit crunch may force it to kiss its annual pretax profit target goodbye. So, which arm of the business is its weakest link – and which ones offer the best hope of getting it out of this hole? We have the answers. > read more

The Humbling Of Citi

The stock of Citigroup is less prized these days than that of Bank of America, JPMorgan and the Standard & Poor's 500 Index. Not long ago, it was the biggest U.S. bank by assets. What the Sam Hill happened? > read more

Watch Those Closing Dinners

Those calories will getcha’. And according to the latest research, they won’t just ruin your girlish figure – they’ll also increase your chances of suffering from dementia later on in life. Something to keep in mind for you rainmakers looking to broker deals until you take your final breath. Read on to find out whether it’s time to reconsider disentangling that ever-expanding belt from the Bubby’s tablecloth. > read more

Kindergarten-Copping The Credit Crunch

A credit crisis arises when many more promises are made than can possibly be kept and disputes emerge about how and to whom promises will be broken. Here, the argument for why it’s less a matter of SIVs than ABCs. > read more

On Banking, Bear Hunting…And (Navel) Gazing Into The Abyss

Remember Friedrich Wilhelm Nietzsche? And his spiel about, “If you gaze too long into an abyss, the abyss will gaze back into you”? Yeah, we don’t really either. But New York Democratic Senator Charles Schumer had this to say about abyss-gazing in The Wall Street Journal, which, predictably, hustled out a lead story today entitled (also predictably) “Inside The Demise of Bear Stearns.” We assume that the unseen exclamation points here are assumed. > read more

Sweat On The Panic Button?

When the Federal Reserve overlooked its own rules to bail out Wall Street in recent days, was this an indication of cold, hard, calculating stoicism in the face of imminent danger…Or just so many skittish Ivory Tower victims flying off the handle? > read more

Paulson’s Masterstroke?

In a hugely gutsy and wide-ranging proposal issued by Treasury Secretary Henry Paulson this weekend, longstanding government agencies end up all over the cutting room floor in favor of creating a controversial, new “supercop” that can abet the Federal Reserve in ways the current harum-scarum financial system cannot. But with so many fiefdoms and sacred cows hanging in the balance, is Washington really ready to play ball to save itself…from itself? > read more

Liquidity Vs Solvency: The Explainer

For those still puzzled by market talk of the stark difference between the two, this is an easy – and entertaining – way of looking at it. > read more

Goldman Renders Unto Caesar

And since Goldman is ostensibly Caesar, what we’re really trying to say here is that it’s rendering unto itself...In this case, to the tune of close to $2 billion, or 90% of the amount it sank into its failing hedge funds last summer. The bank isn’t the only one pulling out, though. There’s also a certain U.S. billionaire investor now headed for the door. > read more

E.On’s Just Desserts

After losing in its bid for Madrid’s Endesa last year, E.On is getting a crack at a batch of its power plants in France, Spain, Poland and Italy for which it has agreed to pay a cool $18.6 billion. So, what makes Spain’s utility industry so irresistibly attractive? Could be that demand for electricity in that country has outpaced the European Union average for more than a decade. And, of course, a few other compelling factoids. > read more

Goldman Fires First ‘Blank’

We ourselves were none too sure about these weird-fangled "blank check" IPOs, but now that Goldman’s doing it, it looks like it’ll soon be right up there with baseball, mom and apple pie. Read on for which company finally inspired the G-men to tip their hand. > read more

Angel Investor: Life After Dealmaking

Can venture capital solve prisoner recidivism? Catherine Rohr believes it can — so much so that she ditched her job at a top private-equity firm to foster the capitalist portion of the criminal mind > read more

Citi’s Next Move

As Citigroup struggles to generate profit again, will setting up an independent credit-card unit and overhauling its consumer-banking arm along geographical lines likely to get it back on track? > read more

Public Vs Private

While bleeding-heart liberals may be tearing their hair out over Eliot Spitzer’s stunning fall from grace, imploring that this is a case of one man’s personal peccadilloes lamentably overshadowing an otherwise commendable public career – as if the two were wholly unrelated – John Fund from The Wall Street Journal gives the best explanation yet as to why this line of thinking can easily be reduced to a steaming mound of dromedary droppings. > read more

Schwarzman Vs Buffett

Two billionaires enter the lion pit. But only one billionaire can come out. These days, the lions are well-represented by the foundering credit markets. Which has made abundantly clear whose business model is probably best. > read more

‘Fed’ Up

Not since the dark days of Paul Volcker has the Federal Reserve considered slashing rates by this much. Despite recent predictions of a 50- or 75-basis-point cut, here’s why traders are now convinced that when the Federal Open Market Committee meets today in Washington, a cut by a full percentage point – or more – could very well be a gimme. > read more

BNP-SocGen Merger, Part II

Though Société Générale has made it abundantly clear it has ample access to a good deal more than the $8.4 billion it’s drawing from a shares issue, BNP, it seems, is unfazed. Here, a French newspaper lets spill how soon the rival bank may make a bid for its ever-reluctant sister Soc. > read more

Carlyle’s Calamity

The credit crunch: it isn’t just for subprime mortgages anymore. Late last night, Carlyle Capital, which only recently held as much as $21.7 billion in mortgage securities, broke the news that its lenders are now ready to extract their pound of flesh. > read more

File Under No #@$%, Sherlock

“This is a good economic transaction for JPMorgan shareholders,” said Michael Cavanaugh, launching the conference call heard round the world (and for which investors received just an hour’s notice) last night. For those of you who missed all the juicy details – or just enjoy feeling like a fly on the wall when it comes to once-inconceivable, market-altering events – here’s your cheat sheet of the highlights and the reactions. > read more

You Do Not Know Lloyd Blankfein’s Pain

Wait, bank CEOs are not sun gods? We did not get that memo. As Goldman braces for a write-down of at least $1.5 billion of loans used to finance takeovers of companies such as Chrysler Corp. (at least according to analysts at UBS and Merrill) Lloyd Blankfein may soon show investors why it’s better to be lucky than smart. > read more

Carlyle: Bigger They Are, The Lighter They Fall?

The unspoken rule of the U.S. financial system and its regulatory regime is that the better-capitalized players should be given plenty of room to fail – if they want it – because they can dust themselves off and get back in the game a lot faster than, say, Auntie Nell from the country who’s liable to squander her entire retirement savings on a flight-by-night forex scheme. But there are exceptions to every rule. > read more

Strange Bedfellows?

Why, after slashing the ratings of almost 10,000 subprime-mortgage bonds, Standard & Poor's and Moody's Investors Service still haven't cut the ones that matter most: AAA securities that are the mainstays of bank and insurance company investments. > read more

Even Curiouser

Police have nabbed another Societe Generale employee in connection with the Kerviel Kerfuffle... Mysteriously, the suspect’s name, which once graced the so-called rogue trader’s Facebook page, has been released several times online in the last 24 hours. And then duly erased. > read more

Kiss That Sweet Salary Goodbye?

First structured credit takes a beating. Now it’s payment structures. Looks like global bank association the Institute of International Finance is on the case, intimating that perhaps now is the time for a new code on bank salaries and bonuses, as if it really wants to do that. (We find it telling that one of the principal bank executives behind this chitchat – Deutsche Bank’s Josef Ackermann – also is rumored to be in the market for a new, invite-only Ferrari Scuderia.) > read more

Sinosteel’s Big Play

And a hostile play at that. Here’s how China commodities trader Sinosteel finally decided to drop the Mr. Nice Guy routine and swing for the fences in a bid for Australian iron ore company Midwest Corp., valuing the entire enterprise at just over $1.2 billion. Could this mean a change of trend in Chinese dealmaking? Quite possibly, remarks one analyst, who noted: “This is the first time a Chinese partner has actually gone in to take the whole company, and maybe it’s an omen of things to come.” > read more

Rogue At Large – Again

Société Générale’s most infamous trader, Jérôme Kerviel, has just been freed from jail, having successfully overcome objections by prosecutors that he might take infernal liberties in contacting possible accomplices or tampering with evidence or fleeing the country (despite having no passport). So, what’s next in what is likely to be a wearisome and protracted charade? > read more

Another Day, Another Emergency Fed Meeting

In the Federal Reserve’s first weekend emergency action in nearly three decades, it green-lighted giving banks and investment firms a new weapon in the fight against financial bedlam: it slashed its so-called discount rate and became a lender of last resort to the largest dealers of U.S. government bonds. But where does that leave the Fed? And, more importantly, its balance sheet? > read more

Theirs Could Be Even Smaller Than Yours

Ahem, we are talking about earnings, here. Naturally. Perhaps this bank’s market timing could have been better when it came to mortgage bets, but in terms of reporting earnings at just the right moment (read: when Wall Street is too distracted by Bear Stearns to think of anything else) we think it’s absolutely brilliant. > read more

International Paper’s $6 Billion Buy

As Wall Street is rocked by the news of Bear’s sad fate, the rest of the dealmaking world marches on…in particular, International Paper, which just agreed to acquire the containerboard, packaging and recycling businesses of archnemesis Weyerhaeuser for $6 billion. (And unlike Bear, Weyerhaeuser will be getting its spoils in cash.) Could this be a turning point for the ailing forest-products industry? > read more

‘Fireside Chats’ Officially Over

Friends Provident isn’t saying that it doesn’t enjoy some good pre-deal foreplay now and then. But enough is enough already. There’s a time for beating around the bush and a time to get down to brass tacks (not to mix metaphors). You know exactly what we mean. > read more

Citi’s Not-So-Pretty Position

On the heels of being slapped with a lawsuit by a hedge fund for its activities in the credit-default swaps market (see story below) and getting spanked by The Wall Street Journal for what the newspaper implied were wussy moves by the bank to shape up its wealth-management operations, Citi’s now getting the stuffing taken out of it by the head of Dubai International Capital, who’s grandstanding today at a private-equity conference. > read more

Silda’s Secret

How is it that insatiable husbands somehow always end up with stoical wives? An under-the-hood look at the long history of successful ladies who, for some reason, stand by their men – even when those men happen to be lying, cheating, publicly humiliating sneaks. > read more

Bear Scare

What happens if your house is burning down – and there’s nothing worth taking with you? That’s the crux of investor worries over Bear Stearns, which, it is theorized, may be forced to seize collateral from Carlyle in the form of mortgage-backed securities (for lack of anything else to take) and not be able to sell it, leaving it hamstrung by fresh losses. A word on the bank’s options in putting this fire out. > read more

Recession Obsession Deepens

The majority of economists surveyed by The Wall Street Journal now agree: the U.S. has probably slipped into a recession. Read on for their musings, their forecasts and how, very aggravatingly, the definition of recession has once again come into question. > read more

‘Mistakes Were Made By All’

So says the very weary Treasury Secretary Henry Paulson about the genesis of our impressive nationwide credit meltdown. (Hey, you can’t say the U.S. doesn’t do it best.) Today marks the release of yet another master plan for plugging up this leaky dike. But we suspect that Wall Street is equally weary – and wary – about this enormous undertaking. In any case, here’s the lowdown. > read more

The Self-Takedown, Spitzer-Style

Eliot Spitzer, the oft-sanctimonious governor of New York, the man who has felled so many both on and off Wall Street has been felled by...himself. For those of you who disliked him, we suspect that even you have been shocked and awed by his statement yesterday and the depth of the salacious details marched out over the past 24 hours about his alleged double life (complete with accounts of haggling over store credits at an escort service and discussions between a prostitute and her boss over how the “client’s” prurient preferences included “things you might not think were safe”). Uh, huh. That said, this is one extremely sad story for the Spitzer family and Spitzer’s devout wife, a Baptist from North Carolina. How long before Fox News digs up the actual hooker who earned in excess of $4,000 for spending more than an hour servicing “Client 9” in the Mayflower’s now-infamous Room 871 the evening before Valentine’s Day? Time will only tell, but this story from the Times gives the full breadth of what transpired that fateful night. > read more

CME Nails Oil Market For $9.4 Billion

Providing a rare bright spot on a grim day for financial markets, the Chicago Mercantile Exchange agreed to buy the world’s top oil market – the New York Mercantile Exchange – for nearly $10 billion. That said, will nettlesome regulators, not to mention disgruntled Nymex shareholders, stand in the way? > read more

Google: One Step Closer To ‘Digital Colossus’?

World domination is clearly nigh for the Internet titan, as it receives a key approval for an acquisition that will bolster its clout in the $37 billion online advertising market. > read more

Deutsche Telekom Splashes Out $4 Billion For Hellenic

Europe's biggest telephone company wants Greece’s biggest telephone company in its pocket – and, to that end, it’s willing to drop some serious lumber. (For instance, that $4 billion? It’s just for a minority stake.) How Deutsche doesn’t mess around when it comes to getting what it wants. > read more

Blood On The Water

Looks like ex-Cerberus exec John Stomber’s Carlyle Capital has now run afoul a passel of margins calls and default notices, according to a news release it dropped very, very early this morning, noting that while its lenders were liquidating some of its mortgage securities the “additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital.” > read more

Bear Scare To Drive Off SWFs?

By all accounts, single white females are still spending up a storm, but that other, more discriminating SWF – the sovereign wealth fund – may have had it with the banks after Bear Stearns’s descent into hell. A tale of how one firm narrowly sidestepped disaster. > read more

Microsoft Still Gooey On Yahoo

High-ranking executives from Yahoo finally deigned to meet with Microsoft’s top brass to discuss the proposed merger that’s now become M&A’s latest elephant in the room. (This, only after Yahoo had meetings with Time Warner Inc.'s AOL unit and News Corp.) As a demonstration of how this was so totally not meant to be a buyout negotiation, no bankers attended the meetings (though they did have wire taps, just in case…kidding). So what exactly took place? Here’s what we do know. > read more

Citi: The Final Move?

Completing what is being branded as Citigroup’s last shakeup after a series of reshufflings, CEO Vikram Pandit has tapped a longtime right-hand man to lead the company’s investment-banking division. But will this exec be able to overcome charges by underlings of being abrasive, noncommunicative and even partially responsible for Citi’s hedge fund hiccups? > read more

Buffett Beats Gates

While 2007 did not turn out well for many (er, that is to say just about anyone) it was a very good year for Warren Buffett, who watched his fortunes climb $10 billion to – oh, just trust us, here; a lot. Since Mexican telecom tycoon Carlos Slim again nabbed the No. 2 spot, guess where that leaves ol’ Bill after a 13-year run in the top spot? > read more

Recession In Sight?

With the Fed conceding a recession is “possible” (Fed Bank of St. Louis President William Poole, yesterday) and widely expected to slash interest rates again this month, the U.S. dollar is receiving its worst drubbing in three years. So…how low can it go? > read more

Meeting Of The Meats

Don’t get too excited, as this deal does exclude live-cattle inventories. But it seems safe to say that Brazilian meatpacking concern JBS is in an acquisitive frame of mind when it comes to bringing home the bacon. Here, all the details of its latest splurgefest in the U.S. > read more

Carlyle Capital Capers

Hey, they are margin calls; this is not the end of the world. And, okay, a couple default notices. Not exactly spilled milk, but we are sure it aspires to be. True, we’re talking about more margin calls than is strictly ideal, but if you don’t have anyone whining at you now and then to pay the piper, we posit you probably aren’t pushing the envelope far enough. Just one way to look at it. > read more

Flowers To Bid $7.1 Billion For What?

After engaging in a mating dance thus far mostly based on rhetoric, here’s why private-equity group JC Flowers may finally be ready to make its move. > read more

Liquidity Alert: What Gives, Bear Stearns?

We would be lying if we claimed Wall Street was having a great day even before the Spitzer kibitzer. Rumors were already flying that potential liquidity bottlenecks could now be plaguing Bear Stearns. While the bank denies there’s any problem, it seems that credit indices are widening sharply as the cost of protecting bank bonds against default reach record levels. Time to prepare for more shock waves? > read more

House Rules: Leap Year Doesn’t Count

Remember last week’s Leap Year bloodbath that made half the market weep? It never happened. Yup, that’s right. Call it the magic of the Fed. > read more

The Economic Malaise That Dare Not Speak Its Name

Unless the person talking is Warren Buffett and someone from CNBC is pointing a camera at him. The Seer of Omaha definitely uttered the R-word yesterday, eliciting shocked gasps across the nation, and making clear that, at least in his mind, there is no doubt anymore as to what is happening in the U.S. That said, the situation is nowhere near as frightful as a few others he might – and did – mention. > read more

Inflation Moves Into Deep Sea

If the cost of filling the average tank of gas is now close to the price of taking a family of four hundred to see Hannah Montana 3-D, what could that mean for the outlying regions of the U.S.? (For example, the ocean?) > read more

Volkswagen’s Nose For The Close

Volkswagen nabbed control of Scania AB, buying Investor AB's share of the Swedish truck company for $2.86 billion and paving the way for a merger with MAN AG that would invariably create Europe’s new market leader. But will this really bring the haggling over a three-way merger to an end? > read more

SocGen Has A Good Day

And a very good day it is. Demand for new shares issued by Société Générale has amounted to almost twice the $8.4 billion it had sought, the bank said today. But what story about the state of SocGen’s finances would be complete without an accompanying update on its so-called rogue trader, Jérôme Kerviel? > read more

Citi Pulls A UBS?

The monster investment bank appears to be beefing up capital by belt-tightening on $45 billion of its mortgage portfolio. Do we detect a move very similar to what we heard UBS was doing earlier this week? > read more

Scoreboard: JP Morgan Biggest Winner, Goldman Biggest Loser

And what kind of scoreboard would that be? Why it’s the one tracking hedge fund assets, piker. Check out the latest standings of all the top banks here – plus, the rankings of your fave brand-name hedge funds. > read more

Crikey, Carlyle!

After a weekend of round-the-clock negotiations, Carlyle Capital, the ailing fund run by private-equity titan Carlyle Group, issued a statement late Sunday night providing the following details of its rickety state. > read more

Hedge Fund: ‘Suckered’ By Banks

As financial markets boiled over in past years, some Wall Street players began selling insurance against the possibility of things going wrong, in what seemed like an attempt at prudence. It wasn't. > read more

They Giveth – And They Taketh Away

It seems banks that lent money to hedge funds are asking for some of it back. Why, as the value of mortgage-backed bonds and other investments plunge, lenders are insisting that borrowers put up more cash, assets and firstborns. > read more

Blackstone: Their Checks Still Clear

And they are writing lots of them, says the private-equity titan’s CEO Stephen Schwarzman. The “severe financial crisis” that started with subprime loans has spread to “panicked selling of even investment-grade assets,” he said during the company’s fourth-quarter conference call. Still, he added: “We’re seeing plenty of opportunities to write equity checks up to $750 million.” Read on for more of B’stone’s outlook for 2008. > read more

Banks Hot For Hedge Fund Clones

Taking a page from a procession of other top banks, Credit Suisse is ripping the lid off a plan to muscle in on the nascent, but (potentially) highly lucrative, hedge fund-replication industry. If that sounds a tad antiseptic, it is. But when it comes to easy profits, beggars can’t be choosers. > read more

Citi: We Didn’t Need Those Regional Banks, Anyway

By selling off batches of U.S. bank branches that are getting bested by the competition, Citi can kill two birds with one stone: admit defeat, plus escape the wrath of its riskiest businesses while reining in consumer lending and bolstering its capital base. That said, is CEO Vikram Pandit doing enough, or is he just moving so many peas around on his plate? > read more

Bank Write-Downs Overdone?

The Federal Reserve is detecting the potential for some irrational exuberance in the writing down of bank assets – much of it because of quirks in the going accounting rules. Here’s how it reckons some assets are being assigned a lower value than they deserve. > read more

United Technologies’ Moment Of Truth

As it mounts its $2.63 billion cash bid for ATM maker Diebold, United Technologies makes known it has attempted to broach merger discussions with its quarry for two years. "Obviously, we believe this is something their shareholders should know about," says Jim Geisler, UT’s vice president for finance. OK. So now Diebold’s shareholders know. But do they also know that UT’s offer falls well below their company’s 52-week high? > read more

Credit Squeeze Yet To Peak?

That’s the consensus of hundreds of private and institutional investors, who in a recent survey predicted the credit crunch likely would continue to intensify well into the second half of this year – and possibly even further. > read more

Solving The Clear Channel Brouhaha

Here’s the lowdown on how banks scrambling to find buyers for $131 billion of unsold loans that financed last year's leveraged buyouts are now starting to break ranks, holding individual negotiations with investors on their own. > read more

HSBC: Bullet Ducked

The biggest bank in Europe by market value showed Wall Street’s titans how it’s truly done, proving that largesse need not lead to large messes in the wake of the subprime debacle. May we present to you the bank’s stellar 2H earnings. > read more

It’s Not Easy Being A Buyout All-Star

Anymore, anyway. As rapid-fire filings these days clearly show, life has certainly changed for the private-equity industry, where easy credit, a steady economy and willing sellers created a buying bonanza in the none-too-distant past. And no firm was more voracious than this one – a company that purchased, on average, a business every 11 days for the past three years. An inside look at how its world has turned upside-down. > read more

UBS Fire Sale?

The stock of Europe’s largest bank is taking a pummeling today, falling to a five-year low in Swiss trading on news from squealing rival banks that it may have liquidated up to $24 billion in mortgage-backed securities, may have to take a slew of additional write-downs, might not pay a dividend this year and – with all that – still be compelled to raise more capital. Here, a tally of the likely damage. > read more

Cash Stash

If emerging data are to be believed, the lumber being stuffed under the mattresses of Corporate America is on the rise, recently crossing the $600 billion mark, according to the S&P industrial index. But one question remains: when do these cash-rich companies plan to start sharing the wealth? > read more

Corporate Bond Ditch?

The cost of shielding corporate bonds from default has officially soared to a record high, following the suspension of Carlyle Group's mortgage-bond unit. It’s not that hedge funds don’t necessarily want to keep them – it’s more likely they won’t have a choice. > read more

A Drag For Credit Ag

Credit Agricole, France's second- largest bank by assets, reported its first quarterly loss since the company went public in 2001 after weathering writedowns linked to melting U.S. subprime mortgages. While the worst may be over for the bank, the there’s good reason to believe this hangover might cause some business interference well into 2008. > read more

Blowing Bubbles

A fantastic explainer from The New York Times this past weekend (in case you didn’t see it) reveals why even the top market mavens overlooked the housing bubble. That said, we would like to know why we should be any less convinced that people simply chose to not acknowledge or deal with inflated housing prices, rather than fail to notice them. > read more

Yahoo Gets Decisive

Yahoo is barring the doors, but if amending bylaws and moving deadlines around is its strongest weapon against the dogged advance of Microsoft, bystanders doubt it will manage to do much more than heighten the suspense ahead of the inevitable. And you know what that is. > read more

Brazil, Russia Mining Firms A Steal?

As metals soar to near-record prices, did you know you could snap up Brazilian producer Cia. Vale do Rio Doce for a song compared with companies such as Australia’s BHP Billiton? (That is to say, 24 percent less.) And there’s plenty more where that came from. > read more

Microsoft/Yahoo: Are They Or Aren’t They?

In discussions, that is. Hey, no matter, it’s only $40 billion-plus hanging in the balance. The following is Dealbook’s dogged record of the verbal gymnastics that have arisen from the talks that are – or are not – happening. > read more

Diebold Thumbs Nose At $2.63 Billion Offer

If United Technologies really has its heart set on Diebold, then it’s going to have to do better than that, says the latter. The thwarting leaves United with only a few options: raise its bid, stage a boardroom proxy battle, or go hostile. But, in this case, some options appear slightly more realistic than others. > read more

Deal-A-Meal: Top Chefs, Miami

We sussed out three deal-friendly choices in the city of fun and sun. > read more

Spitzer, Debriefed

And, by that, we mean literally. > read more

Room Key: They’ll Leave The Light On

Stay someplace other than the George V? Mais oui. > read more

Ground Transportation: A Robot For The Road

Introducing a GPS so smart, it's almost alive. > read more

Overhead: A Suitcase In Full

The perfect bag for those trips when you want to pack a little lighter. > read more

Tool: I Know You

Introducing ThinkPad’s precocious little cousin. > read more

My Three-Hour Vacation: Driven In Dallas

How a native son accomplished his mission to do his town right. > read more

Terminal: Ninth Wonder Of The World

Where to find a jaw-dropping edifice that opens into a very special lounge. > read more

Deal Of A Lifetime: Good Trade

With two key clients looking to make a trade, but neither wanting to give up control, this firm found a secret ingredient that brought all participants to the table and sent them away satisfied. > read more

Three Commandments: Pressure Player

Hiter Harris built a firm on the idea of seizing opportunities and coming through for clients in a crunch. Here, he offers his game plan for successful recruitment. > read more

Toy: Hot Shot

So, you think you know the camera phone? However incongruous putting together a camera and a phone may seem (and we readily admit that it is) don’t knock it until you take a gander at this sweet gadget. > read more

Fine Print: Breaking Up Is Hard To Do

How one man challenges convention in style and (legal) practice by eschewing the entrenched reverse breakup fee in leveraged buyouts. > read more

The Courtship: Office Mates

When it came time for Executive Centre CEO Paul Salnikow to find a partner, he turned to this deep-pocketed tenant who was patently familiar with his space. > read more

Tombstone: Smart Cookie

A trip down memory lane, when Credit Suisse underwrote one of the more unlikely IPOs of the decade. > read more

Home Equity: King Of The Mountain

Why settle for purchasing a piece of the valley when you can acquire a mountaintop instead? These new high-altitude residence clubs make the climb to the summit worthwhile. > read more

Retreats: Large Cap

>Behold Cap Cana, the Dominican Republic’s newest — and most obscenely ambitious — luxury real-estate enclave. > read more

The Big Winners in the Visa IPO

The credit crisis that has been haunting the stock market for months wasn't enough to scare investors away from the IPO of the world's largest credit card processor. Overcoming the jitters that have battered many of the lenders that issue its cards, Visa Inc. sold 406 million shares at $44 apiece late Tuesday to raise nearly $18 billion and complete the most lucrative initial public offering in U.S. history, reports the Associated Press. The IPO also is expected to generate more than $500 million in fees for Visa's team of investment bankers, led by JPMorgan and Goldman Sachs & Co. > read more

Road Show: Great Porsche, Bad Idea

Road Show The 911 Carrera S is both Porsche’s finest roadster — and its most deeply flawed. We put a fearless financier behind its wheel and shot up California’s Highway 1 to see if that flaw would prove fatal. > read more

Credit Suisse: Time To ‘Remediate’

We love that word, “remediate” – it is also used, we notice, to describe the clean-up efforts after a toxic-waste spill. Or in this case, what follows when your traders intentionally mess with the pricing models you gave them to the detriment of everyone. Today, the bank reveals the high cost of their fuzzy math – and what it plans to do in the future to keep this from happening again. > read more

Fashion: Power Tools

The clothes may make the man, but it's the accessories that make the money man. Here’s how to swing that bling. > read more

Blue Sky: Aerial Assault

Looking to stage a hostile takeover of the friendly skies? Behold the 787 VIP, your very own war room…with wings. > read more

Contrarian: Money Trail

How Westwood Capital's Dan Alpert is working with overextended homeowners to profit from the mortgage mess. > read more

Venture: High Society

When canvassing the South Pacific, here’s how to stage a mutiny against crowded cruise ships and puddle-jumpers by traveling in the most luxurious way: island-hopping by helicopter. > read more

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